Question

х JUUD Heading 1 Heading 3 1 Normal 1 No Spac... Heading 2 Head ht Styles MC AFC AVC ATC 1 Paragraph A. Short-Run Costs of a Production Schedule. Calculate Table OUTPUT TFC TVC TC 0 200 0 200 175 2 200 300 3 200 500 4 200 800 5 200 1,200 6 200 1,700 7 200 2,300 Determine the following: 1. What is the behīvior of the TC as Output increases? Answer the same question in regard to the TFC. Why the difference? 2. What do the AFC, AVC and ATC curves do as regards increases in output? Is there a difference in the AFC? Why? 3. What does the MC curve do with regard to Output? Why? What is the relationship between the MC curve and ATC, AVC curves? Would this be important information for the Producer?

Answer 1

Date : Q PRC MC (ATQ) AFC AVC AIC 0 200 O - 200 175 200 175 375 2 3 300 SOO 125 loo ISO 250 200 Soo 700 66.67 166.67 Soo Tooo 30o so 200 2 so 200 1200 1400 400 20 240 280 6 200 200 1700 soo 33.33 283.33 316.67 7 2300 2500 too 28.57 328.57 357.14 1 TC increases there increase in production change no n Independent produced. ARC : TEC TFC Q AFC declines with increase it spread in output units. 8 ones a large AVC TVC Q AVC with increase output typically be cause of diminishing marginal product. Both U-shape in ATC . DTC od when MC CAIC AIC falling ATC - then ATC is at its minimum MC > ATC ATC is rising